Major U.S. stock indices fell lower in relatively light trading on Friday as investors reacted to dwindling aid to the U.S. economy and rising coronavirus infection rates. The S&P 500 benchmark and blue chip Dow posted small losses this week, while the technology-laden NASDAQ was slightly higher from last Friday’s close.
On the cash market on Friday the S&P 500 index settled at 3557.54, a decrease of 24.33 or -0.72%. The Dow Jones industry average finished at 29263.48, down 219.75 or -0.80% and the NASDAQ Composite closed at 11854.97, down 49.74 or -0.45%.
More than half of the “red zone” that is rampant in the USA
Investors remain concerned about the economic cost of rising infections and new lockdowns and restrictions that increased on Friday. White House Coronavirus Task Force Coordinator Deborah Birx said Friday that more than half of the United States is a virus-ridden “red zone” and Americans should limit Thanksgiving gatherings to immediate family members.
According to a CNBC analysis of the Johns Hopkins data, the 7-day average of daily new COVID-19 infections in the US is now 165,029, 24% higher than a week ago. Last Thursday alone, 187,833 cases were reported. Many states have rolled back their reopening plans and introduced new restrictions to contain the spread.
California Governor Gavin Newsom on Thursday issued a “limited stay at home” order for the majority of the state’s residents requiring unnecessary work and gatherings to cease between 10:00 pm and 10:00 pm. Meanwhile, the Centers for Disease Control and Prevention (CDC) advised Americans against traveling for Thanksgiving.
Disagreements between the Treasury Department and the Fed weigh on sentiment
Dragging sentiment on Friday was a disagreement between the Treasury Department and the Federal Reserve over continuing to fund some of the emergency programs launched during the recession.
Treasury Secretary Steven Mnuchin is trying to end a handful of the Fed facilities that bought corporate bonds, as well as the Main Street Lending program for small and medium-sized businesses. The move has pushed the central bank back as the programs continue to play an important role in supporting the fragile economy.
Mnuchin defended the decision to phase out the programs at the end of the year, noting that the Treasury Department could reactivate them. “We still have a lot of capacity,” he said.
Mnuchin told CNBC’s Jim Cramer on Friday that people misunderstood that decision, adding that there is still plenty of money to raise funds if needed.
“That was a very simple thing. We are following the intention of Congress, “said Mnuchin in” Squawk on the Street “.
Mnuchin’s comments that the remaining money could be used for grants rather than loans suggested that “this could be a path to a targeted fiscal stimulus deal at the Lame Duck meeting,” said Yousef Abbasi, global market strategist at StoneX , a global financial services company.
Mnuchin also said Republican leaders will discuss a plan to use the Democrats to implement targeted fiscal stimulus.
Take a look at our economic events today Economic calendar.
This items was originally published on FX Empire